Types of Partnership:
1. Limited and Unlimited Partnership: When liability of a partner is limited to the extent of his contribution in the firm, it is called Limited Partnership. On the other hand, when all the partners of the firm are individually and collectively responsible for discharging the liabilities of the firm then it is called Unlimited Partnership.
2. Fixed Time Partnership and Non-fixed Time Partnership: When a partnership is formed for some specific period, for example; for 2 years, 5 years or so on, it is called Fixed Period Partnership. In this case, the partnership is dissolved as soon as that specific period expires. When no period is fixed for partnership, it is called Non-fixed Time Partnership.
3. Partnership at Will and Special Partnership : When a partnership is formed to carry on business for an uncertain period, it is called Partnership at Will. Such partnership may be dissolved with the consent of all the partner or by any one partner giving notice for dissolution.
When a partnership is formed for a specific purpose or specific work, it is called Specific or Special Partnership. The partnership under this case the partnership, is automatically dissolved as soon as the work is completed. For example, to undertake construction of road, dam, bridge etc.
4. Legal and Illegal Partnership : Although, registration of a partnership is not compulsory yet is has to carry on its business as per the Provisions of Partnership Act. For example; minimum number of partners must be 2 and maximum number 50 in a firm. When a partnership firm carries on its business in accordance with the provisions of the act, it is called Legal Partnership.
On the other hand, the partnership is called Illegal in the following cases:
- When number of partners exceed 50 in a firm.
- When the object of partnership is illegal.
- When the business of partnership is against the public code of conduct.
- When any one or more than one partner belongs to enemy country.
